The Tory and Capitalism

If you were to ask most people today whether conservatives believed in capitalism or not the answer you would receive would be yes. The neoconservatives, a species of liberal who regard liberal democracy, especially in its American form, as the crowning achievement of human civilization and wish to make it universal, through military force if necessary, would certainly agree. What about Tories, the foundation of whose classical conservatism is belief in the duty of royal and ecclesiastical authority, rooted in tradition and prescription, to work together for the common good of the society?

To answer this question, we must first answer another, namely, what do we mean by capitalism. This is not an easy question to answer because the word capitalism is used to denote the actual economic system that has become predominant in Western countries over the last two-and-a-half to three centuries, a theoretical system of economic organization, and an economic activity and, although it has become the habit of capitalism’s enemies and detractors to jump from one of these senses to another as if they were synonymous, they are not always in harmony with one another. The actual capitalism of history has never looked like quite like what theoretical capitalism looks like on paper, and to complicate matters further historical capitalism has not remained the same throughout history, looking very different at the beginning of the twenty-first century, than it did at the beginning of the nineteenth.

The word capitalist entered the English language in the eighteenth century with the basic meaning of someone who owns capital, in other words a property-owner or businessman. The word capitalism appeared later in the nineteenth century, at first simply meaning the condition of being a capitalist, of owning capital. By the end of the nineteenth century it had taken on its other senses through the influence of Karl Marx, although he himself used it sparingly.

The pre-Marx meaning of capitalism survives in its usage in reference to an economic activity. In this sense, capitalism is what the capitalist or businessman does. He owns productive property, which he either works himself or hires others to work for him, trades or sells the product, the profit of which, that is to say the difference between what he receives for the product and the expense of production, is his income to live off of, save, or reinvest.

Capitalism, in this sense of the word, has been around for as long as men have dwelt in towns and cities – since the dawn of civilization, in other words – and the Tory recognizes it to be an indispensable part of civilization and one which is a positive benefit to human life and society. While the Tory will condemn dishonest and dishonourable business practices, such as the cheating of customers and the underpaying and overburdening of workers, and the like, he cannot and will not join with those who condemn business, commerce, and the ownership of property as being immoral or unjust in and of themselves. Samuel Johnson, the most distinguished Tory of the eighteenth century, in his The Adventurer, No. 67 praised the booming trade of London for the way in which “by a thousand unheeded and evanescent kinds of business, are the multitudes of this city preserved from idleness, and consequently from want” (1) and is quoted by his friend and biographer James Boswell as having said that “'There are few ways in which a man can be more innocently employed than in getting money.”

The other meanings of capitalism can be traced to Karl Marx, who used it in the historical sense to denote the economic conditions brought about by the Industrial Revolution. That Marx, a progressive, atheist, revolutionary, who built his entire philosophy upon a visceral hatred of the civilization in which he flourished, in other words the embodiment of everything the Tory opposes, made himself the archenemy of capitalism, might be considered reason enough for the Tory to identify with capitalism were it not for the fact that the liberals reasoned that way first and attached the label capitalism to the system of economics they advocated. That system, however, the Tory can only endorse with many qualifications.

In 1776, Scottish moral philosopher Adam Smith published his treatise An Inquiry into the Nature and Causes of the Wealth of Nations. That which Dr. Johnson spoke of admiringly in The Adventurer, the way commerce generates an abundance of goods through numerous and diverse specialized crafts and trades that allow each person to find profitable employment in his own particular niche, Smith subjected to in-depth analysis. From this analysis he concluded that the market – not any actual marketplace but the activity that goes on there, the exchange of goods and services through the medium of currency, considered in the abstract – is a self-regulating mechanism, in which the forces of supply and demand maintain equilibrium, which takes the self-interested actions of its participants and directs the outcome for the common good. He used this conclusion to argue against mercantalism, the government practice at the time of regulating and protecting trade so as to maximize the inflow of bullion, and in favour of a government policy of allowing the market to operate on its own.

This is the doctrine of economic liberalism and, after the publication of Karl Marx’s Das Kapital in the late nineteenth century, liberals began to refer to their theoretical system in which the market operates freely under a state that practices laissez-faire (2), as capitalism. Thus was born the ongoing debate between classical liberals who argue for capitalism, meaning the free market system, and the followers of Marx who argue against capitalism, meaning the post-Industrial Revolution Western economic system, with a sort of mutual agreement between the two to pretend not to notice that neither means quite the same thing that the other does by capitalism.

The Tory does not quite agree with either. The idea of the market as a self-regulating system that contains its own equilibrium is one that the Tory can accept, especially since it is so evidently true that even the socialists more or less accept it today, but not in its usual liberal formulation. The problem the Tory has with liberal economics is the same problem he has with liberalism in general – the false assumptions that the individual is prior to society and that society is an artificial construction of the individual, that freedom is the natural state of man outside of society rather than the natural state of man inside society and made possible by the social order, and that freedom involves man emancipating and following his passions and appetites rather than ruling over them.

The market, the Tory maintains, works the way liberal economists describe it, but only within the context of a stable and secure social and civil order, and especially one whose culture has been shaped and continues to be influenced by the classical and Christian moral traditions. In these traditions, patterns of moderate behaviour in which man rules over his appetites are praised as virtues, whereas habits of indulgence in the same appetites are condemned as vices. The basic appetites for sex, food, and material acquisition are not sinful or vicious in themselves, but when indulged in to excess and allowed to rule over a man, become the vices of lust, gluttony, and avarice, which are three of the Seven Deadly Sins, albeit the three least in the traditional ranking. Business is there for the production, distribution, and acquisition of material goods, and the market is there to facilitate business. Neither business nor the market are intrinsically avaricious, despite the claims of socialists whose entire system of thought, as we will see in our next essay about socialism, is built upon the greater sin of envy, but they require the restraints of the classical and Christian moral and cultural tradition to help men rule their appetite for acquisition and keep it from turning into avarice.

Without these moral and cultural restraints, the Tory insists, market capitalism becomes a force that erodes the very social and civil order that provides the context that allows the market to function. Capitalism, as it has played out in history, has frequently been that force, uprooting communities, dissolving traditions, and attacking the moral, social, and civil order and today, in its international, globalist, corporate form it is aggressively laying waste to what is left of the older traditions, as most recently evidenced by the way the large corporations intervened in the American courts against traditional marriage. Karl Marx saw the way in which capitalism uproots and dissolves the traditional order as something for which the bourgeoisie deserve praise. The Tory sees it as that for which capitalism most deserves condemnation.




(1) http://www.johnsonessays.com/the-adventurer/no-67-on-the-trades-of-london/

(2) This literally translates as “let do”. The basic idea of laissez-faire is that of a “hands off approach”, in which the government lets business operate on its own.

Green Toryism

How to Think Seriously About the Planet: The Case For An Environmental Conservatism by Roger Scruton, Oxford, Oxford University Press, 2012, 457 pp., US$ 29

What colour is conservatism?

The answer to that question, historically and traditionally, has been blue. To be even more precise, it has been royal blue. To be conservative is to be on the side of tradition, custom, religion, old and established ways of doing things, the ancient constitution of church and state. Historically, this has meant that conservatives have defended royalty against modern forces that seek to do away with it. For this reason, the official colour of the Conservative Party is the colour long associated with royalty and aristocracy, blue.

Here in Canada, however, there are those who believe that the traditional conservatism of Britain and Canada shares common ground with the political left in their mutual suspicion of classical liberalism. Those who identify as conservatives, but who wish to emphasize this perceived common ground with the left, borrow the colour of the radical left and are known as “Red Tories”. (1) They could not have picked a left-wing symbol that is further removed from what conservatism stands for. The red of the left stands for the blood spilled in violent revolution.

With the publication this June of How to Think Seriously About the Planet, by philosopher and true blue Tory Roger Scruton, a new colour is contending for a place on the conservative banner: environmental green.

We have become accustomed, in recent decades, to think of concern for the environment as being the intellectual property of the left. The left encourages this, claiming the environmentalist movement as its own, and denouncing the right as supporting the despoilers of the environment. Conversely, conservatives have often been willing to concede the environment to the left. We find it difficult to take seriously the concerns of environmentalists when they so often seem to be hysterical alarmists who resemble Chicken Little running around warning everybody that the sky is falling.

In How to Think Seriously About the Planet, Roger Scruton makes the case that concern for the environment would be more at home on the right than on the left and outlines a conservative approach that he convincingly argues would handle the matter of the preservation of our physical environment better than the leftist approach currently favoured by the environmentalist movement.

He begins by addressing the matter of the left’s perceived monopoly on the environment, and saying that “that image is highly misleading”, a contention he backs up by providing a brief outline of the history of the environmentalist movement in Britain and the United States, showing how conservatives were involved from the beginning alongside those of other persuasions. If this is the case, why do conservatives and environmentalists so often seem to be at odd with one another?

Environmentalists distrust conservatives, Scruton says, because they “have been habituated to see conservatism as the ideology of free enterprise, and free enterprise as an assault on the earth’s resources, with no motive beyond short-term gain.” (p. 7) This seems to be a very accurate diagnosis, one which shows that the environmentalists have erred both in the way they see conservatism and the way they see the free market. This error is not entirely their fault, however, because many “conservatives” have contributed to this understanding of conservatism and the market. It is, however, an error because conservatism is not first and foremost about the free market.

If conservatism is not “the ideology of free enterprise”, what is it?

Scruton writes:

Conservatism, as I understand it, means the maintenance of the social ecology. It is true that individual freedom is a part of that ecology, since without it social organisms cannot adapt. But freedom is not the only goal of politics. Conservatism and conservation are two aspects of a single long-term policy, which is that of husbanding resources and ensuring their renewal. These resources include the social capital embodied in laws, customs, and institutions; they also include the material capital contained in the environment, and the economic capital contained in a free but law-governed economy. (p. 9)

This is an excellent short definition of conservatism (2) that shows exactly why conservatism and environmentalism should go together. Conservatism is about preserving and passing on a heritage we have received from past generations to future generations. That heritage includes the sort of things conservatives have traditionally valued, which Scruton in the above quotation describes as social capital, but it is also includes the sort of things environmentalists cherish, our physical surroundings, places and the beauty and life contained therein.

If conservatism is about preserving what we have received from past generations – social institutions, associations, and customs, our physical environment, economic and political freedom, etc. – and passing it on to future generations, it follows that conservatives will understand the purpose of politics in these terms. Scruton says that the purpose of politics, as conservatives understand it, is “to maintain a vigilant resistance to the entropic forces that threaten our social and ecological equilibrium” and that it “concerns the maintenance and repair of homeostatic systems – systems that correct themselves in response to destabilizing change” (pp. 9, 11). Left wing groups and movements, on the other hand, tend to see the purpose of politics as “mobilizing society towards a goal “ (p. 34).

This left wing tendency can clearly be seen in the environmentalist movement today. The response of many environmentalist organizations, to potential threats to the environment, is to sound the alarm and try and rally society behind the cause of saving the environment from those threats. This means that environmentalist causes tend to be conceived of on the largest scale possible causing environmentalists to look to government action on the highest level possible as the solution. Scruton believes that a conservative approach, that treats the environment as homeostatic system to be watched over and adjusted from time to time to maintain the equilibrium would be more appropriate and that the left wing approach is a significant cause of the ineffectiveness of this kind of environmentalism. (3)

The objection can be made that today we are dealing with environmental problems on a scale so large that they require large scale government action. Currently, the issue that is most likely to be pointed to as an example of such a problem is climate change. In his second chapter, Scruton addresses this objection. After pointing out that it serves the interests of those who believe in extensive government action and control for problems to be treated like world threatening catastrophes, and that previous alarms such as Paul Ehlrich’s predictions about global overpopulation and – ironically – the global cooling warming of the 1970’s preceded the current concern with global warming, Scruton addresses the hot topic of anthropogenic global warming. He presents the claims of those arguing for a worst case scenario and those of the skeptics, treating both sides with respect. The greenhouse effect was established as a scientific phenomenon as far back as the 1860’s, he says, and global warming and cooling are both “fairly routine occurrences”, with human activity such as the release of greenhouse gasses being one of many factors that contribute to both. If the worst case scenario is true, however, if the survival of our species is under an immediate threat by the emission of greenhouse gasses, the action that it will be necessary for us to take will require collective cooperation, which he argues is best rooted in a sense of community. “It is precisely to the definition and maintenance of this ‘we’” he writes “ that conservative politics of the kind I shall defend is directed.” (p. 68)

Perhaps the most important theme of this book is the question of what motivates people to act in ways which preserve the environment. There are various motivations to act in ways which harm the environment, but these tend to be variations of the basic human desire to pass the costs of our actions onto others while claiming the benefits for ourselves. Environmentalists recognize this motivation, especially when they see it in the actions of large corporations, but, as Scruton points out, the capacity for governments to export their costs onto others and into the future is much larger. So what then would motivate us to bear the costs of our actions ourselves and to act in ways which will preserve our environment and the natural capital and beauty contained within it for future generations?

Scuton’s answer, in one word, is oikophilia. This word, which seems to be of Scruton’s own coinage, and which is derived from the same Greek word as the more familiar English words economy and ecology, means the love of home. That means more than just the love of the building you live in. The oikos, Scruton writes, “means not only the home but the people contained in it, and the surrounding settlements that endow that home with lasting contours and an enduring smile” and it is a place “that is not just mine and yours, but ours” (p. 227). In explaining how oikophilia is a motivation to preserve the environment, Scruton points to the classic expression of conservative thought in the antirevolutionary writings of Edmund Burke. Burke saw society as being an association in which past, present, and future generations are united, and concern for future generations is a duty owed to past generations. He taught that people belong to “little platoons” – small social associations such as families, churches and clubs and it is in the intimacy of these associations that public affection is born and spreads outward. Scruton draws out the environmental implications of these ideas – out of love for our ancestors and descendents, in our little platoon in society, we are to dutifully maintain the home/oikos we have inherited from past generations and to pass it on to future generations.

An obvious implication of all of this is that the work of maintaining and protecting the environment ought to be done on the local level. Throughout this book Scruton is a consistent advocate of local groups and communities acting to preserve their local environment as being preferable to attempts to protect the environment on a global scale. Government has a role to play in preserving the environment, but it can also contribute to the problem of environmental irresponsibility when it confiscates the problems and responsibilities of smaller groups, generating moral hazard.

The idea that environmental responsibility is rooted in oikophilia has implications for how we conceive of the environment itself. A home is not something that we find for ourselves in nature untouched by man. Scruton is critical of the idea in American environmentalism, of thinking of the environment as wilderness, something to be valued for not being influenced and shaped by man. Nor is a home something that we value only for its utility, its usefulness to us. We build, shape and decorate our homes, which we value for their beauty as well as their utility, and try to make as aesthetically pleasing to ourselves as possible. If our environment, our surroundings, is to be cared for as a home, this means that we will be as concerned about how it looks as we are in conserving the natural resources contained within it. In his eighth chapter Scruton shows how concern for beauty, connected with a sense of the sacred, has traditionally inspired people to care for their surroundings. He indicts modernism in architecture for creating buildings to stand out rather than to fit in to an aesthetic whole and indicts functionalism for designing buildings that become obsolete when their original purpose disappears.

How To Think Seriously About the Planet will probably meet with objections from two quarters – the kind of “conservative” who seems to believe in nothing but the free market and the kind of environmentalist who is wed to activism, government control, and international agreements – both of whom agree about little else, but would come together to dismiss Scruton’s classical conservative notions of tradition, loyalty, and the home as antiquated mysticism. For those of us who still share these ideas, however, this book makes an excellent argument for the care and upkeep of our physical surroundings as part of the heritage we hold in trust for those who will follow us.

(1) In the United States, states that tend to vote Republican are called “red states” and states that tend to vote Democrat are called “blue states”. This is unrelated to the Red Tory phenomenon in Canada.

(2) For his much more in depth explanation of conservatism, see Roger Scruton’s earlier The Meaning of Conservatism (Harmondsworth: Penguin Books, 1980).

(3) Another such homeostatic system, according to Scruton, is the market economy under the rule of law. While free enterprise and national loyalty are frequently condemned by conventional left-wing environmentalists, whatever problems exist within a national market are exacerbated by attempts to replace the market with socialism, or to create a market that transcends national boundaries. Scruton explains why this is. In each case accountability is removed increasing irresponsibility. In a socialist economy laws fail to hold enterprises accountable because they are owned by the same entity that makes the law. In an international free market, multinational corporations are not accountable to any one set of laws. This same unaccountability, Scruton also notes, exists among environmentalist NGOs, which, unlike traditional civil associations, “often exist purely for the sake of their goals” (p. 28) and neither respond to nor desire feedback from their supporters and are accountable only to themselves.

GTN Tory Classics No. 5: Basic Economics

The essay that follows was originally the third in a seven part series beginning with “The Economic Age” and ending with “The Free Trade Cult”. The introductory essay to that series was the last essay I re-posted here in my “Tory Classics” series. I wrote that essay as an introduction to the economics series because I wanted to start by placing economics in perspective by arguing that economics is not the most important thing in the world. The following essay is a more typical introduction to the topic of economics and deals with such basics as production, distribution, and consumption.

Towards the end of this essay I argue that production is more important than distribution or consumption because without production there would be nothing to distribute or consume. This is the most important point in the essay. Many are the free market economists who seem to understand everything else about economics except this point.

Basic Economics


By Gerry T. Neal
June 4, 2009

Every country’s economy has three basic parts: production, distribution, and consumption. Production refers to the creation of material wealth and consists of agriculture and manufacturing. Consumption is the use of the material wealth created in production. Distribution is how material wealth gets from the producer to the consumer.

Material wealth is not the same thing as money. Material wealth includes land and buildings, food and clothing, and other goods that people need or want. Money is just one good out of many and its primary function is to simplify the exchange of other kinds of goods.

Goods which are used to produce other goods are called “capital goods” or just “capital”.

Some people believe that the best and fairest economy is one in which capital goods are owned collectively by the public with distribution being in the hands of the state. These people are called socialists. Others believe that capital goods do not have to be publicly owned but that the system – production, distribution, and consumption – entirely or in part, should be under strict government regulation.

These people have been proven wrong time and again. So much so that they should be embarrassed to express their views in public.

What happens when production is controlled by the state? We need look no further than the late USSR and Red China during the days of Mao to find our answer to that. The state proved incompetent in the production of even the simplest of goods and massive poverty, starvation, and misery was the result.

Without state control of production, there can only ever be partial state control of distribution and consumption. This control takes the form of the state confiscating wealth from the private sector through taxation and handing it over to other people.

Some people believe this is the compassionate thing to do. They are mistaken. Only people can be compassionate, not governments. If you are genuinely compassionate you will express that by helping the poor out of your own wealth. To support with your words and votes, a policy in which the state helps the poor from money it takes from people other than yourself, is not a genuine form of compassion. It is, in fact, a way of avoiding being compassionate, by placing the responsibility for helping the poor onto the shoulders of the state and the taxpaying public instead of bearing it yourself.

The government social programs that make up what is called “the welfare state” were sold to voters as initiatives that would eliminate poverty and bring about a general prosperity. Have they done so? Far from it. Instead they created a permanent and growing, privileged, underclass. They created tensions that threaten to rip the social fabric into pieces by fostering a sense of frustrated entitlement in the poor and a sense of resentment in the middle class which is forced to bear most of the tax burden for the upkeep of the poor.

The idea that the production, distribution, and consumption of material wealth should be planned and controlled by the state is simply wrong. It has never worked in the past, it is not working in the present, why would we be so foolish as to think maybe it will work in the future.

No, the production, distribution, and consumption of material wealth are best left in the hands of private property owners, who buy and sell the goods they produce and the services they offer, in a free market.

A market is a situation (not necessarily a place) in which someone trades something they own for something someone else owns. A “free” market is a market where buyer and seller are allowed to come to their own terms as to the exchange. Let us say a dairy farmer goes to the market to sell his milk and his neighbor who keeps chickens goes to the market to sell his eggs. The dairy farmer needs eggs and the chicken keeper needs milk. The dairy farmer is willing to trade a liter of milk for a dozen eggs and the chicken keeper is willing to make this exchange and so they do so. The price they have decided upon is fair and just. What the dairy farmer is willing to accept in exchange for his milk is based on his own calculations of his own needs, and what the chicken keeper is willing to accept in exchange for his eggs is based on his own calculations of his own needs. No set of government experts anywhere would be better qualified to judge these matters than the farmers involved.

If government experts are not competent to come up with a better price for a single exchange than the participants, they are much less competent to set prices for everybody in the country. Their attempts to do so only cause harm.

When the government says “You cannot buy labour for less than so-many dollars an hour” this is not benefiting workers. No one’s work becomes more valuable because the minimum wage rises. All this does is eliminate jobs that are not worth paying someone minimum wage for. The jobs thus eliminated, are generally the jobs that would otherwise be taken by people entering the workforce, trying to get the experience that better paying jobs require. Everyone who ever got frustrated because all available jobs required experience which could not be obtained without getting a job can thank the government – and the bleeding hearts and the unions which demanded minimum wage laws from the government – for it.

Most market transactions do not consist of the direct barter of goods like eggs and milk. The eggs and milk are both sold for money instead. Money is the medium of exchange in an economy and as such it is the single most valuable commodity. Historically, precious metals like gold and silver have made the best moneys. We no longer use them for money today because governments prefer a paper (or electronic) currency that they can control. By controlling the money supply, they are able to devalue it through inflation (increasing the money supply). This allows the government to confiscate the country’s wealth without raising taxes because they get to spend the new money at the old value of money, before the increase in the money supply causes money’s value to drop relative to other goods in the market.

This discourages saving because if your money is going to be worth less in the future than it is today it makes more sense to spend it now than to save it. Saving is important, however, if a person or a country wishes to become wealthy – or even financially independent. Inflation is the path to national poverty.

We don’t notice inflation as much if consumer prices are not rising. If the production of consumer goods has increased the inflation will keep the prices of those goods from dropping rather than causing it to rise. Thus governments have encouraged manufacturing companies to step up production by outsourcing to countries where it can be done cheaper, causing consumer prices to remain relatively stable while they drain the country’s wealth through inflation.

But what happens when a country increases consumption and allows others to do its production?

Production is more important than distribution and consumption (and agricultural production, which produces necessities is more important than manufacturing which produces luxury items). Production creates wealth which is distributed through the market. Without production there would be nothing to distribute. Consumption uses wealth up. Consumption without production leads to poverty.

Those who think that outsourcing their country’s productive capacity will lead to prosperity because it brings consumer prices down would do well to consider that.

A sound national economy requires production on the part of private property owners, who sell their goods in a free market, and a stable money supply that keeps its value thus encouraging people to save.

GTN Tory Classics 4: The Economic Age

One of the things I dislike the most about contemporary politics is the exaggerated importance it attaches to economics. This is true both of those who favour economic freedom and private property on the one hand and those who believe in a state-planned economy and/or collective ownership of property on the other.

This does not mean I attach no importance to these matters. I believe in private property and in laws protecting private property. I believe that economic decisions are best made by those who will be most affected by the outcome of those decisions. For most economic decisions this amounts to the free market position - that people are themselves the best judges of what to buy and what to sell, how much to spend or ask for in a market exchange. Some economic decisions, however, must be made by the leaders of communities or the governments of countries. These are decisions whose outcome affects the entire community or country.

Examples of the first kind of economic decision include decisions as to what kind of career to train for, whether to stay in a job or look for a new one, whether to open a new business or seek employment, whether to save, invest,or spend one's income, and, if one has this option, what other than essentials to buy with one's income.

Examples of the second kind of economic decision include decisions as to whether a country needs domestic production of a particular commodity or whether it is better to rely upon foreign imports and decisions as to how much and what kind of infrastructure to build and maintain out of the public purse.

These decisions cannot be made in isolation from each other, of course. The decision a government takes, to protect its domestic iron industry, because a consistent supply of foreign iron is threatened by war, will affect the choices of those buying and selling iron and deciding whether to go into an iron-related line of work. Likewise, economic decisions at the level of a community or country, cannot properly be made without taking people's personal economic choices into consideration.

In 2009 I wrote a series of economic essays, most of which
were arguments for economic liberty and against socialism. It ended with "The Free Trade Cult", which argues that history demonstrates that free trade doesn't work the way economic liberals say it does. I intend to post several of the essays from this series including "The Free Trade Cult". The first essay in the series, the one which follows, was "The Economic Age". This essay came first, because it contained the most important thing I wished to say about economics - that we, whether we be capitalists or socialists, place too much importance on economics.

The Economic Age


By Gerry T. Neal
June 2, 2009

“The age of chivalry is gone. -- That of sophisters, economists, and calculators, has succeeded; and the glory of Europe is extinguished forever.”

Those famous words were spoken by Edmund Burke in 1793, in response to the murder of Marie Antoinette by the revolutionaries in France. 2 years previously the 18th Century Whig statesman had written Reflections on the Revolution in France in which he rejected the abstract, rationalist, planning that led to the horrors of the French Revolution which had only just begun, and embraced the Tory view of traditional, organic society in which authority, rights, and liberty were firmly established by prescription. He had seen, even then, where the Revolution was headed.

Clearly, Burke did not think very highly of economists. What did he mean by the word “economist”? The context of Burke’s remarks would suggest that “economist” like “sophister” and “calculator” was being used to describe a class of people who rejected the noble sentiments of the age of chivalry – the gallantry and honor that, as Burke had just remarked, should have caused “ten thousand swords” to leap to Marie Antoinette’s defense. These people replaced these sentiments, with numbers, cold reason, and pragmatic materialistic calculations of their own self-interest.

Burke’s lament, was over seeing the day when such people would become dominant, when society would be rationally planned from the top down, and when people would be primarily guided by cold, rational, materialistic, pragmatic motivations in their everyday decisions rather than by noble sentiments and loyalties. He believed, that much of what made life worth living, which he summed up in the phrase “the unbought grace of life”, would fall by the wayside and perhaps be lost in such a society.

Burke was correct in his beliefs and his predictions. We see the evidence all around us. Far too many people identify “the good life” with obtaining material possessions and dismiss concepts like honor, loyalty, virtue, and character. The concept that true happiness is not related to how much you have compared to other people but to being satisfied with what you have and where you are, while familiar to the ancients and the great Christian ethicists, is alien to such people. This is true regardless of whether the rational materialist favors “capitalism” or socialism.

That does not mean that economic questions are unimportant or that “capitalism” and socialism should be regarded as equally good or equally bad.

Economics, a term derived from the Greek word for the management of a household, is today used to describe the discipline which studies the mechanics of the production, trade, and consumption of material goods and services. Thought on these subjects has been recorded for millennia, of course, but as a distinct formal discipline economics was only in its infancy stage in the 18th Century. While the nature of the discipline is such as to make it especially attractive to people with the rationalist, materialistic mindset Burke decried, it is by no means necessary for one to be a rationalist, materialist to form an educated opinion on these subjects.

Edmund Burke’s own views on economics are known to us. He was a friend of Adam Smith who published his An Inquiry into the Nature and Causes of the Wealth of Nations in 1776. Smith, who died in 1790, once remarked that Burke was the only man he had ever known who “thinks on economic subjects exactly as I do, without any previous communications having passed between us”. Burke, for his part, had heaped praise on Smith’s book. This suggests that Smith’s comment was no exaggeration.

Smith’s book marked the beginning of what is now called classical economics. It is both a history of the evolution of production and commerce and an argument for the free market. The specialization resulting from the division of labor results in greater production of any given product. The same principle applies on a larger scale to the specialization resulting from commerce. As everybody produces more and more of the product they specialize in to sell to others who in turn are producing other products, the general wealth of the nation increases, everybody is better off, and the best thing the government can do to facilitate the process is to keep out of the way.

Later, the term “capitalism” would be applied to Smith’s system. This was not Smith’s term. It was in fact coined by Karl Marx to refer to the period in his dialectic understanding of history, in which feudalism was supplanted by industrialism and commerce, and which Marx believed would be supplanted by revolutionary socialism leading to his communist utopia in its turn. The identification of Marx’s “capitalism” with Smith’s free market probably came about because Smith’s glorification of commerce could be seen as championing the activities and interests of the emerging bourgeoisie class. Marx, who saw everything in terms of class conflict, identified the bourgeoisie as the heroes of the capitalist revolution against feudalism and the villains in the coming revolution of the proletariat.

It is interesting that Marx regarded capitalism, not as a conservative or reactionary force in society, but a revolutionary one. As Marx was a champion of the revolutionary cause this observation on his part has to be regarded as praise of capitalism, which may seem odd, but actually makes sense when one considers his view of history as progressing towards a certain end.

Was Marx right? If he was right about capitalism being a revolutionary force what does that say about Smith’s arguments for the free market, which were endorsed, as we have seen by the leading 18th Century opponent of revolution?

The answer to the first question is yes. If we define capitalism as the historical transformation of rural societies with a predominantly agricultural economy into urban societies with a predominantly industrial economy, then capitalism was undoubtedly revolutionary. Capitalism weakened all sorts of ties that are fundamental to a functioning society. The ties between people and the land they live on were weakened as people moved en masse from the farms into the cities looking for work. The ties between people and previous generations were weakened as crafts and trades were removed from the home and concentrated in factories and stores. Institutions like the family were undoubtedly weakened and Thomas Carlyle was not unjustified in remarking that human interaction was being cheapened by being reduced to the “cash nexus”.

A few observations are necessary at this point. The first is that capitalism as described above was not the free market Adam Smith was advocating. The rise of modern, manufacturing-based economies, concentrated in large scale factories in urban centers, was accomplished with the active assistance of governments. This is a matter of the historical record.

The second is that those who condemn capitalism for its atomizing effects on society will not find an acceptable alternative in socialism or communism. Socialism’s objection is not to an urban economy centered on industrial manufacturing. Its objection is to that economy being in the hands of private owners instead of “the people”. The negative results of capitalism described above were regarded as positive and progressive by Marx. If capitalism was revolutionary, socialism is a thousand times more revolutionary.

A third observation is that manufacturing and increased production are not themselves the problem. It is not wrong for a society to desire a higher material standard of living for its people and this can only be achieved by increasing production. What is wrong is when people and society place make material prosperity their ultimate goal and make all other considerations subservient to that goal.

Adam Smith argued for a free market on the grounds that it was the best system for maximizing human industry and production and therefore increasing the nation’s material wealth and standard of living. He was right but his was not the best argument for the free market. The best argument for the free market is that freedom is itself a good. Moreover, freedom, the right and ability of people to make their own decisions for themselves (including economic decisions), is a superior good to any material goods that can be manufactured, bought, and sold. It is for this reason that a free economy should be defended against the advocates of a planned economy. The latter believe that they can somewhere find a group of experts competent enough to make everybody’s economic decisions for them.

That is the same arrogant mindset of rationalistic planning that Edmund Burke saw devastating France in the 1790s.